Mr. Ingrassia joined The Times in 2004 after 25 years at The Wall Street Journal, where he worked as a reporter and held several editing positions, including assistant managing editor. He oversaw The Times’s coverage of the economic crisis that was a finalist for the Pulitzer Prize for public service in 2009. Mr. Ingrassia was recently named the winner of the 2009 Minard Editor Award, honoring excellence in business and economic journalism editing, one of the annual Gerald Loeb Awards for distinguished financial journalism.

Q. Has Wall Street learned anything? All I hear is Wall Street banks want to pay the government back so they can be free to pay their bonuses to upper management. That loss appears to be what bothers them the most, NOT that they created this recession which has caused massive hurt to so many. It looks like they don't GET IT. I have lost faith in so many of the government regulators. The little people are the big losers here and you don't hear Wall Street banks express concern for them. Shameful.

Q. It would be interesting to read your views on the issue of business entities being "TOO BIG TO BE ALLOWED TO FAIL." The Obama administration seems to have ignored this fundamental issue that is central to the future of both U.S. and global economics.

What, in your opinion, can and should be done to avoid the future (potential) need for taxpayer assistance to firms that are too big to be allowed to fail?

A. You both ask questions that go to the core of what went wrong and, just as important, what needs to be done to make sure another financial meltdown doesn’t happen again.

There is lots of blame to go around for what went wrong. Simply put, banks took excessive risks, government regulators didn’t provide sufficient oversight and too many borrowers — companies and individuals — took on more debt than they could afford. Now we are all in a bind as a result.

What have Wall Street, and Washington, learned? One of the most important lessons, I think, is that financial innovation in theory can be good, but isn’t always in practice. Anything taken to extremes can be risky, and has to be managed and regulated.

Take home mortgages. Few people could buy a house without them. But mortgages that require no down payment, and allow the borrower to pay less each month than the interest owed? That doesn’t make economic sense for the vast majority of borrowers, yet that’s precisely the kind of mortgage that many big banks were offering and that became popular during the housing bubble. And regulators blithely let it happen.

Credit cards? A convenience that lets you and me carry less cash in our wallets. But multiple cards that are given out like candy to people without steady income and with bad credit histories? Again, as astonishing as it sounds, that became common practice. Here, too, regulators failed to pay close attention.

Healthy banks and a robust Wall Street are essential to making our economy tick. If they are over-regulated, that can stifle the business — which means fewer jobs created for Americans. If they are under-regulated, or poorly regulated, then . . . well, we know what happens, because we’re in the middle of it. The challenge for lawmakers and regulators, and for bank executives, is to get the balance right.

Clearly, figuring out how — and how much — to pay bankers is part of the fix. Working hard and figuring out new ways to finance business should be rewarded, but taking wild risks shouldn’t be. Yet that happened in recent years, as Times reporters found in examining the origins of the financial meltdown last year in our series The Reckoning (“On Wall Street, Bonuses, Not Profits, Were Real”).

A few banks already have reined in big salaries and stretched out bonuses over longer periods, so executives and traders don’t get big paydays before you know if an investment that looked good at the time might actually turn sour. But some Wall Streeters are resisting change, which is why Washington is paying close attention, and why we are covering this closely (“U.S. to Propose Wider Oversight of Compensation”).

Similarly, Washington is trying to get its arms around the “too big to fail” question. A global economy can’t work if we only have small, community banks. But if an institution is so big, and is allowed to take so many risks, that its failure could cause a financial meltdown and taxpayers have to rescue it, that poses a problem, too. Washington and Wall Street have to find a middle ground.

Do Times Journalists Have Business Experience?

Q. I'm curious as to what percentage of your staff — reporters and editors — have actual, "hands on" business experience (other than after-school or college jobs) that gave them exposure to substantive workplace issues involving operations, payroll, policy, compeitiveness, labor relations, etc. Also, what percentage hold business, economics or other relevant degrees?

A. Jeff: Well, let me assure that I, for one, have been getting a lot more exposure than I’d like to substantive business and workplace issues lately. And I bet that everyone who works for a newspaper today feels the same.

Most editors and reporters got into the news business because they have a passion for exploring the important issues of our time, in all their complexity. For most of our lives, we didn’t even think of it as a business. Our revenue and profits were generally so stable that pay reductions and layoffs and benefit cutbacks were things that happened at companies in other industries, not ours.

Wow, has that changed. As I’m sure you know, even before the great recession hit, the newspaper (and magazine) business has started going through tectonic change. We’re not just reporting the story, we’re part of the story.

The Internet has changed our comfortable business model. Many papers are slashing their staffs. A few have even closed, or become online only publications. I firmly believe The Times will thrive, because we’ve embraced the Web — hey, Talk to the Newsroom is just one of many things we do online that we couldn’t easily do in print! — and we continue to do the kind of quality journalism that it’s hard to get in many other places. But, make no mistake, these are difficult times, and they give us a better insight than ever into what people in other troubled industries are going through.

I actually don’t know how many of my reporters have business or economic degrees, or experience working in other businesses. Some definitely do — I’ve got some M.B.A.s and some lawyers on the Business Day staff. But you don’t need that to be a great business reporter. You need smarts and curiosity and persistence and, yes, passion, to find out what is going on and tell it in a compelling way that brings the news to life and shows what it means to people and why it matters.

Resort Real Estate: Boom or Bust?

Q. I have been involved in resort real estate marketing for many years, and find that market continues to struggle. Developers, it seems, don't believe there are buyers out there, and have cut their marketing to bare bones.

Still, there are 80+ million baby boomers on the verge of retirement. Don't you think they have the means, and the desire, to purchase second homes in resort destinations?

Being involved in the industry that was at the center of the financial crisis can be a tough roost to occupy.

A. Actually, I’m going to have to be honest and disagree with you. I think I’m pretty safe in saying that there aren’t nearly as many baby boomers who have either the means, or the desire, to purchase a resort home, as a year or two ago.

Alas, some no longer are on the verge of retirement; given what has happened to their investment portfolios, they're going to be working longer than they planned.

So it isn’t surprising that marketers are holding their fire — although I’m sure that I speak for many in my industry who wish they were advertising more!

Indeed, a lot of people feel your pain. Not just people working for companies related to the housing industry — everyone from carpenters to small builders to mortgage lenders to furniture makers — but airlines and hotels and retailers and, well, just about anyone. Oh, did I forget auto makers? It may feel like you are at the center of the crisis, but you can’t be having a harder time than they are.

That’s what has made this recession so bad. Few businesses have been untouched, and confidence has been shaken badly.

What will it take to turn things around? Inevitably, things have to improve where the problems began — yep, the housing industry. With more people losing jobs, foreclosures continue to weigh heavily on the housing market, and efforts to slow them with mortgage relief haven’t yet worked, at least in part because there’s too little relief being offered many borrowers in trouble, as The Times has reported. (“Promised Help Is Elusive for Some Homeowners”.

There are, of course, some signs that things are getting better. The government stimulus program has helped offset weak spending by consumers, for example. And the nation’s biggest banks appear to be slowly on the mend, thanks in no small part to government bailouts.

But there still are likely to be rocky times ahead. So, while there must be some real bargains in the resort home market right now, I wouldn’t look for the business to pick up in a big way any time soon.

The Times vs. Everyone Else

Q. How would you define your coverage as different from The Wall Street Journal, The Financial Times or other competitors?

A. Dan: Isn’t it obvious? The Times is the best. :)

Seriously, The Wall Street Journal and The Financial Times are fine and formidable publications. Having such stellar competition is good for us, good for them, good for the people we write about and good for you, the reader. I truly believe that all three are important to a robust democracy, and to enlightening readers about what is going on in the economy.

I figure you mostly want to know how we stack up vis-à-vis business coverage, but that is only part — albeit an important part — of a package The Times offers that is more comprehensive than any other newspaper. We cover international news, politics, national affairs, sports, science, the arts and lifestyles, as well as the New York region.

In covering business news, there are lots of similarities among us and our main rivals. We all aim to give readers big news scoops. We all broadly report on business, finance and the economy. We all strive to get the story behind the story, explaining to readers not just what is happening but also why and what it means, who is acting responsibly and who might be acting less so.

That said, each views coverage with a slightly different lens. The Financial Times focuses more on the world of finance (hence its first name), especially international finance. The Wall Street Journal has expanded its coverage of non-business news in the past year, but still prides itself on its coverage of the economy writ large, and of the biggest companies in important industries.

At The Times, we make it the highest priority to cover the big issues in the economy, business and finance. Coverage of companies matters to us, of course, but we are especially proud when we shed light on how the economy really works, when we highlight important public policy issues and when we raise questions about dubious business practices that warrant scrutiny.

“The Reckoning” series, about the causes of the financial meltdown that was a finalist for the Pulitzer Prize for public service and is also finalist for a Loeb Award for financial reporting, is one recent example. Another series, “The Evidence Gap,” explored medical treatments used despite scant proof that they work despite their high costs. “Golden Opportunities,” examined how businesses and investors seek to profit from the soaring number of older Americans, in ways helpful and harmful. “Gilded Paychecks” looked at compensation practices to explain how big pay packages became so common in corporate America.

Our mission isn’t to write incremental stories, or routine “commodity” news that you can get elsewhere, but we do endeavor to cover everything important that an informed reader might want to know, which means being highly competitive on major breaking news, too. Our coverage of the Wall Street meltdown has been widely lauded (“Bids to Halt Financial Crisis Reshape Landscape of Wall St.”), as was the riveting coverage by a team of reporters about the Ponzi scheme run by Bernard L. Madoff, (“Madoff Scheme Kept Rippling Outward, Across Borders”). Times reporters also are finalists for Loeb awards later this month for their coverage of these momentous events.

Q. The business section has many columnists on a great variety of subjects, but not a columnist on consumer protection as such, despite the importance of consumer protection, as demonstrated recently by enactment of the Credit Card Act and the key role consumer protection failures played in causing the economic crisis, to take only two examples (I’m not referring to the type of column that focuses on helping consumers who have encountered problems in dealing with businesses, such as the Haggler column, or the “Your Money” column, which appears to focus more on personal investments). Why not?

As Ron puts it, “My goal in life is to write about anything and everything that hits you in the wallet. To me, investing is actually the simplest part of the equation, as long as you believe in the indexing gospel (and I do — still do). So ‘Your Money’ is not about personal investments at all — I maybe hit that topic, defined broadly (including retirement accounts) maybe 8-10 times per year.” You can look up all his past columns easily on the Web.

To show how consumer-friendly Ron is, I asked him jot down a few of his favorite consumer protection columns. Quicker than you can dial a call center in India, he emailed me the following list:

2) “Consumers are Dealt a New Hand in Credit Cards”: This story, which ran on the front page, dissected the credit card legislation just passed in Washington, noting that in some ways it fell short of what is needed to help consumers.

3) “The Hidden Peril of Deferred Compensation Plans”: This was a forceful reminder to anyone eligible for a deferred compensation plan that there are risks. Yes, it's a personal investments piece but it had a strong dose of consumer advocacy.

4) “The Pros and Cons of Buying a Chrysler”: This column asked the question that everyone was talking about but that other papers were reluctant to utter in print: Does it make sense to buy a Chrysler or G.M. car right now?

We also have other consumer protection coverage in Business Day. In addition to The Haggler, which you mentioned, we recently added a new column, “Patient Money.” It runs on Saturdays, and examines medical and insurance issues from a personal financial point of view. One recent column: “Strategies for Saving on Prescription Drugs.” And another Saturday column, “Shortcuts,” offers advice about an array of consumer topics, like one on the preposterous come-ons saying you can make a fortune working from your living room, “Work at Home and Make Big Money? Let the Wise Be Wary.”

You want more? We’re going to give you more. We will soon launch a consumer blog covering all of these issues, and then some. Watch this space.

A. Nat: You're right. One of our jobs is to make even complex things understandable, and cutting through the jargon can help the reader a lot.

One challenge, of course, is that the world is getting more complicated. Few readers had ever heard of credit-default swaps until they helped bring down the financial system last fall, and it wasn't all that long ago when even some business reporters would have had a hard time explaining clearly what CDSs are — oops, there I go abbreviating. A great thing about the Web is that you can find Times stories that explain them in fairly easy-to-understand terms. Our ace Wall Street reporter, Gretchen Morgenson, spotted the problem posed by credit-default swaps before just about anyone else, way back in February 2008. Her story "Arcane Market Is Next to Face Big Credit Test" defined a CDS by using an analogy: "Like a homeowner’s policy that insures against a flood or fire, these instruments are intended to cover losses to banks and bondholders when companies fail to pay their debts." And our terrific graphics department made it even easier to grasp by working up a smart illustration, "A Primer on Credit Default Insurance," that helped readers visualize how a CDS works.

We don't always do so well, as when we used apps as shorthand for applications. An application, or app, is a software program that is loaded onto smartphones, like the iPhone. These apps can do everything from letting you download New York Times stories that you can view on the phone's screen, to enabling you to use the phone as a digital voice recorder, to allowing you to watch live videos of sports events, like the Masters golf tournament.

I ran that past one of my tech editors — I mean technology editors — and he says that my explanation is right and easy for him to understand. For you, too, I hope.

Q. What does a P-E ratio tell us about any given stock? I know how it's determined, but I've never understood what it says about a company or a company's stock. Could you tell me in layman's terms and in plain English?

A. Lance: P-E ratio stands for price-to-earnings ratio, and it is one way of telling how expensive or cheap a company's stock is relative to other stocks. It refers to the ratio of the price of the stock to the earnings per share, thus helping an investor compare the profitability of one company versus another company.

As a general rule, the lower the ratio, the more reasonably priced the stock is for an investor. For example, if a company's stock trades for $10 a share, and the company earned $1 a share over the last 12 months, the P-E ratio is 10. If it trades for $10 a share, and the company earned just 50 cents a share, the P-E ratio is 20. You'd rather own a stock with higher profits than lower profits, of course, which is why the P-E ratio of 10 means the stock is more attractively priced.

Traditionally, stocks on average have a P-E ratio in the range of 12 to 18. When the P-E ratio rises to 20 or higher, some investors get nervous and decide to sell, because it means the company is making lower earnings for each dollar invested, as indicated by the stock price.

One caveat: Stocks expected to rise rapidly usually have high P-E ratios, because investors usually are willing to pay more for a stock with strong future growth prospects. Google, for example, currently has a P-E ratio of about 32, based on its closing stock price Monday of $439, and its annual earnings per share of $13.67. (Earnings per share is calculated by dividing the total earnings by the number of shares of stock a company has issued.)

What's Missing as Newspapers Cut Back?

Q. Given all the budget cutbacks -- not only at the Times, but throughout journalism -- combined with the absolute deluge of news amid the economic crisis, can you and your colleagues actually do your jobs? What is missing that we might have otherwise learned about if traditional journalism were healthier?

A. Alex: Doing good journalism takes time, and people. The best stories can take weeks, or even months, to research and write. Better technology has made some types of reporting much more efficient. You can access and search through databases online, rather than having to travel across the country to get a look at documents and records as you had to do in the past. But reporting a complicated story usually means interviewing a lot of people and sometimes means going someplace to see and hear what is going on. All of this costs money, and many newspapers — including The Times — have less as a result of declining advertising revenue.

I'm happy to say that I think we still have the resources to do the kind of great journalism that The Times has always done. We had eight Pulitzer Prize finalists this year, and five winners, a testament to the enterprising work being done here on a wide vareity of topics. We have lost some staffers, unfortunately, but — fingers crossed — so far haven't had to cut any important areas of coverage. As the business editor, I have compensated by moving more reporters to where the big story is — banking and finance — to make sure we aren't missing any major news and, even more, are doing the deep explanatory and investigative reporting that you expect of us, and that we expect of ourselves. We've now got nearly a dozen in Business Day devoting all or much of thier time to this important area of coverage. And my colleagues on the National and Metro staffs, and in the Washington bureau, are also devoting more resources to covering how the economy is affecting people around the region and the country. They've provided some terrific coverage we wouldn't otherwise have carried. Just one example: Damien Cave, the Miami bureau chief for The Times's National desk, wrote about a community devastated by the housing bust in a story headlined "In Florida, Despair and Foreclosures."

But you ask a good question when you wonder what is missing that we might otherwise have learned. I think that is a big issue in some cities where once-proud newspapers have laid off some of their talented reporters. We all depend on the type of digging and exposing that a good newspaper does, not just to keep everyone honest but to illuminate critical issues that need attention. Unfortunately, we often don't know what is missing until it is found — invariably, in the past, by a relentless reporter, and there are fewer and fewer at many newspapers.

Is Credit Card Crisis Looming?

Q. A few months ago, I was hearing lots of talk that the next crisis was going to be credit cards and credit card companies. I haven't heard anything along those lines in some time. Do you think the crisis has been averted or is it what I'm worried about — no one is talking because they fear more loss of consumer confidence, but that the debt is building and people are less able to pay than before?

A. Diane: You are right in asking about credit cards. Times reporters have written for some time that credit card defaults were bad and getting worse, and it still remains a problem, so we have continued to cover this issue.

The question is, how much worse might things get?

That depends, of course. How long with the recession drag on? How high will the unemployment rate go? The longer and higher, the greater the defaults on credit card debt, because it is hard to pay your monthly bills when you haven’t had a job for a long time. We started spotlighting this last fall, when banking reporter Eric Dash wrote a front page story on Oct. 28, “Consumers Feel the Next Crisis: It’s Credit Cards.”

More recently, on May 10, he teamed up with colleague Andrew Martin in a story headlined “Banks Brace for Credit Card Write-Offs.” We ran that story after the government’s stress tests of big banks indicated that, in an “adverse” economic situation, the nation’s 19 biggest banks could expect nearly $82.4 billion in credit card losses by the end of 2010. The story noted: “At American Express and Capital One Financial, around 20 percent of the credit card balances are expected to go bad over this year and next, according to stress test results. At Bank of America, Citigroup and JPMorgan Chase, about 23 percent of card loans are expected to sour.”

How high are those numbers? Well, consider that banks wrote off an average of 5.5 percent of their credit card balances last year, and even at the end of the year the rate of write-offs was just 6.3 percent. And, after the technology bubble burst in 2001, credit card losses got as high as 7.9 percent.

So, anything near the figures under the government’s “adverse” scenario would be worrisome numbers if they come to pass, because credit cards in the past have been among the most profitable businesses of the big banks. If they instead rack up big losses on credit cards, it will be harder for them to recover.

We can hope that the nascent signs of economic improvement mean that the losses will be lower. But, this is one of the many unknowns still clouding the economic outlook.

Q. Newspaper accounts state New G.M. and Chrysler will have competitive wage structures. Ron Gettelfinger states current employees will not lose wages, benefits or pensions. Does this mean G.M. and Chrysler will have competitive wage structures in 20 years when the present employees have retired?

Q. Were the secured creditors in Chyrsler placed in a worse position because of the government bailout money (which I am assuming had to be paid back first)? In other words, had there been no bailout money, would the secured creditors have more Chrysler assets to be paid back out of?

By the way, I do not consider bondholders as greedy speculators — I can "empathize" with them, because I myself could have purchased a bond thinking it was a safe investment for retirement.

A. Ken and Susan: It wasn’t that long ago (was it?) that pop bands were celebrating the U.S. auto industry. I still remember the Beach Boys singing about a girl having “fun, fun, fun, till her daddy takes the T-Bird away” (a k a, the Ford Thunderbird). And Jan & Dean crooning about the “Little Old Lady From Pasadena” driving her “brand-new, shiny red, super-stock Dodge” to the refrain, “Go granny, go granny, go granny, go!”

Ah, yes, the good old days.

But as your queries show, the once-proud auto industry is going through hard times.

The biggest issue, of course, is whether U.S. automakers have come out of this painful restructuring more competitive. The issue is yes — but a qualified yes, so far, rather than a resounding yes. General Motors and Chrysler both have reduced their costs as a result of being forced into bankruptcy, while Ford has cut its costs, too, albeit to a lesser extent, without receiving government aid and going through bankruptcy.

Photo

Larry Ingrassia.Credit
Tony Cenicola/The New York Times

They have done this in a number of ways: bankruptcy allowed G.M. and Chrysler to wipe out most of their debt, so their interest expense is very low. They have laid off thousands more workers, cutting both management and labor costs. In an agreement with the United Auto Workers, the companies are giving them stock to finance a large part of their unfunded pension obligations, thus saving lots of cash. And, while the U.A.W. did technically manage to keep wages and benefits the same for current workers, the union made concessions — like eliminating the “jobs bank” in which workers received nearly all of their regular pay even if they sat around doing nothing; requiring union members to work longer to receive overtime pay; and easing restrictive work rules.

Will that alone make the automakers competitive? Well, it puts their costs more closely in line with foreign transplants — like Toyota and Honda — that make cars in the United States. (For an analysis of how the Big Three’s costs stacked up before the restructuring, read this lucid column by David Leonhardt, “$73 an Hour for Autoworkers And How It Really Adds Up.”

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The question about how creditors were treated in bankruptcy is interesting, because it has sparked much debate. Secured creditors appealed to the Supreme Court the agreement that was reached to enable Chrysler to emerge from bankruptcy court proceedings; after delaying the deal for a day, the Supreme Court decided on Tuesday not to hear the appeal.

The appeal revolved around the secured creditors’ complaint that they should have received far more than the 29 cents they are getting for each dollar of the $6.9 billion owed them; that’s because, they argue, bankruptcy law gives secured creditors higher standing than everyone else.

This issue is important, and not just for Chrysler. If the Supreme Court had decided to hear the appeal, it could have been the first test for the authority being exercised by the Obama administration. The government moved quickly to restructure Chrysler by using all of its persuasive power to get reluctant parties to go along, with the aim of keeping the bankruptcy proceedings from getting bogged down for months or longer. But secured creditors felt the bankruptcy judge moved too quickly, without fully considering their position.

To your point about whether secured creditors got less because the government loaned TARP money to Chrysler, the answer is not really. The government isn’t being repaid its loan; instead, it is getting stock in Chrysler in lieu of repayment of the loan money. Of course, the creditors could have received that stock if it hadn’t gone to the government, but then taxpayers would have felt cheated for their help in keeping Chrysler alive.

We live in fascinating and historic economic times.

Finding Safe Banks

Q. What are the 10 safest banks in America for one's life savings? Who publishes a list of safe banks?

A. I am not aware of anyone publishing a list of the safest banks in America. But you don’t really need a list to feel that your life savings are safe in a United States bank. The Federal Deposit Insurance Corporation — i.e., the federal government — insures deposits up to $250,000 in banks. If you have more than that to deposit, F.D.I.C. insurance will cover up to $250,000 deposited in a different bank, and on and on and on, if you’re really loaded and want to stash it in lots of banks. Just remember that as long as you keep no more than $250,000 in any bank, you should be able to sleep easy.

Where Is the Investigative Reporting?

Q. Your comments to date regarding business writers is that you find them curious individuals and curiosity, persistence, and passion are characteristics that make for good journalists. Unfortunately, it seems more and more that todays journalists are reporting on the "crash" instead of the dangers on the track before the crash. It seems that for the most part that "investigative" in investigative journalist has become a lost art. Can you opine on why journalism is trending more this way? The state of our financial markets, the excess risk posed by banks and the problems with present regulatory environments were hardly spoken about until after the collapse when suddenly everybody had an opinion to write. Do you not think that some of this could have been averted if the media was more the leader than the follower in reporting potential crisis or conflicts?

A. I can’t agree more with you about the importance of investigative journalism. It matters. It isn’t easy to do well, because it requires time to deeply report an issue. That means a newspaper needs enough reporters, because a few won’t be writing the daily news and enterprise you want and expect from us every day. Some publications, sadly, no longer have the staffs for investigative journalism.

The Times does. Indeed, I think you are wrong in saying that we (and others in some cases) didn’t ring alarm bells about the potential problems in the financial and housing markets, long before things started melting down in 2007.

Maybe some people didn’t read our stories, or don’t remember reading them, but we were writing them. Lots of them.

In August 2003, Times business columnist Gretchen Morgenson wrote a column headlined, "Mortgage Markets Are Out of Control." She warned about "the huge mortgage-backed securities market and the leveraged traders who call it home." She wrote that mortgage bond market was becoming increasingly volatile, suggesting that traders could not adequately hedge their risks. She cited one expert who "fears that the size of the market and the fact that so many players are heavily leveraged make a disaster almost inevitable."

In June 2004, Edmund Andrews in our Washington bureau wrote a story headlined, "The Ever More Graspable, And Risky, American Dream," about the dangers of some loans made to low-income homebuyers: "A kaleidoscopic array of mortgages for people with little cash or overstretched budgets has enabled families of modest income to take on debt that once would have been beyond their reach." He quoted experts who were worried that many first-time buyers could be pushed into default.

In March 2005, Times reporters David Leonhardt and Motoko Rich wrote a front-page story, "Trading Places: Real Estate Instead of Dot-Coms," that compared how the excesses of the dot-com era were being repeated in housing. After reciting the many parallels, the story stated: "Another lingering echo of the stock market boom is the role of the Federal Reserve, the nation's central bank. In the 1990's, the Fed kept interest rates relatively low because it saw little risk of rising inflation despite a booming economy, helping feed a fever for stocks."

Again, in July 2005, Ed Andrews wrote a prescient story headlined, “Loose Reins on Galloping Loans.” It warned: “For two months now, federal banking regulators have signaled their discomfort about the explosive rise in risky mortgage loans.” They had cautioned banks not to let homebuyers borrow too much. They had fretted about no-money-down mortgages and “liars’ loans” that required no proof of income. “The impact so far?” the story asked. “Almost nil.” Why? Because federal banking regulators were reluctant to take corrective action, for fear they would “stifle financial innovation,” one bureaucrat told him.

In August 2005, in a story headlined, “Good News, Bad News: Your Loan's Approved,” Eduardo Porter, then an economics reporter, wrote: “Many first-time home buyers are being pushed into the embrace of creative financing. As the housing boom lifts the median home price way beyond the budget of huge numbers of Americans, middle-income home buyers are increasingly turning to such mortgages — a decision that could well come back to haunt both them and the banks behind the loans later on.”

Could the crisis have been averted if we had written even more? I wish we had as much power as you suggest. We have covered the excesses of executive compensation, well, excessively, including in the “Gilded Paychecks” series I mentioned in an earlier answer, yet executive pay kept rising.

I can assure you that we will stay on the beat, and continue to do the type of enterprising and investigating reporting that puts the spotlight on important issues and potential problems. But it is up to regulators and legislators to take it from there.

Coverage of Small Businesses

Q. There are a lot of studies that say that small businesses are a strong growth engine for the economy. Yet The Times devotes a small amount of ink on Tuesdays to covering small business. Clearly there’s been a lot of news about large companies suffering from the current economy. But some of the news seems to be “commodity news” — articles that you can get elsewhere. Couldn’t The Times devote more space to small businesses as a way to tell the story behind the story? For example, it’s not so just that dealerships are closing around the country — it’s the impact on the businesses that surround dealerships. (Richard Perez-Pena could look at the decline in dealership advertising and its pending impact on an already battered local media.) Or a deeper look at how small businesses are trying to survive the credit crunch. The financial impact of boomers as their parents may consider declaring bankruptcy, and need their adult children’s financial support.

A. Norman, do you have an inside source at The Times? If not, then maybe you are clairvoyant, because your question comes just as we are expanding our coverage of small business.

The reason is simple. As you note, small businesses are important to our economy. The Small Business Administration says they generate as much as 80 percent of all net new jobs.

Much of our new coverage will be on NYTimes.com. Next week we plan to launch a new blog devoted to small business, called “You’re the Boss.” A lot of business owners feel as though they have few places they can turn for advice and support, and we think this blog will give them smart ideas about managing their businesses.

One of the continuing themes will be the challenges, stresses, and rewards of being an entrepreneur. We will also write about the economy from a small business perspective; the politics and policy of small business; and financial advice tailored specifically for business owners. Interestingly, owners, perhaps because they’re a little too comfortable with risk, have a reputation for not being very good at investing their own money.

You will see many stories about how the recession is playing out in these countries.

As we have found in the past year, there is truly a global economy, and what happens in the United States affects Europe and Asia and the rest of the world. And vice versa.

We consider covering the other major economies of the world — China and India, yes, but Germany, Britain, France and the rest of Europe, as well as Japan and Russia — as a core part of our coverage mission. There never seems to be enough room in the paper for all the stories we would like to run on any topic, but I do think we’ve done a good job of covering how the financial meltdown, and the recession in its wake, have rippled around the globe. And that includes China and India.

Again, these stories are an integral part of what we do. Even more international business news can be found on our Global Edition Web site, at global.nytimes.com.

Deciding When to Break Breaking News

Q. How do you decide when a breaking news story is ready to publish? Before the Internet that decision was made for you. It was when the presses ran. Now you could theoretically publish breaking news stories real time, sentence by sentence, as they were happening. Obviously, there is a vast middle ground in there. What does it look like?

A. Fred: In the brave new world of newspapers, there are multiple deadlines. Like some voters in Chicago, we believe in "early and often," in our case when it comes to publishing.

Because our readers expect the most important news when it happens — not tomorrow morning, when they pick up the printed New York Times — we give it to them now. Or they will go elsewhere.

If it is a scoop, our inclination now is to post it online right away, except in unusual circumstances. Not so long ago, we hoarded those for the printed paper, but so many of our readers first get their news online that we want to give them the latest.

If it's a major breaking news story, we have to give you something different tomorrow than what we gave you online today.

Here’s what I mean: If a story breaks early in the morning, we give you the straight news. Assuming it is important enough, we also start reporting and writing a richer, more analytical story for the next day’s paper, what we have come to refer to as a second-day story on the first day. I could cite many examples of this, but one of the best is our coverage of the Microsoft takeover bid for Yahoo early in 2008. The news broke in the early morning on a Friday. We wrote and updated the news throughout the day, and came out with a package of smart, incisive analysis in the Saturday paper:

The challenge is to have something for you, the reader, to want — and need — to come to us for, both online and in the paper. Getting that right is the most important thing in the media’s Internet age.

What So Bad About Deficit Spending?

Q. We keep hearing about the growing deficit. What are the tangible negatives of the deficit/ loss jobs, lower living standard,higher interest rates etc. I would like a layman's explanation that I can share with my 14 year old what the negatives are that he(he is bright) will understsan if he reads it.

A. Tim: Budget deficits in and of themselves aren’t bad. Few people could buy a house without going into debt by taking out a mortgage; lots of people do, and never have a problem.

But, as with anything, excessive budget deficits can be bad, in many ways.

Perhaps the best way for your 14-year-old to understand this is to think of the U.S. budget just like the family’s household budget — only with a heck of a lot more zeros. You can have a budget deficit and live beyond your current cash income, but only for a while and only if the deficit doesn’t get too big.

If you are running a deficit in your household budget — i.e., you are spending more than your income — you probably are borrowing (with a mortgage, or by purchasing things on your credit card) to make up the difference between your current income and your expenses.

No problem — if your earnings are increasing, or if you expect to receive a big inheritance (or win the lottery). You can keep buying new cars, sending your kids to expensive colleges, going on long vacations at five-star resorts in the Caribbean, etc.

But let’s say that your earnings aren’t increasing. Or, even worse, maybe they’re decreasing, because your hours at work got reduced, or you don’t get a bonus. And let's say that you added a lot more debt than you planned, like the government sometimes does. All of a sudden, you are having a hard time paying your bills. Banks aren't keen on lending you any more money. Your credit card company reduces the amount that it will let you charge and, because you now pose a higher risk of not paying, it charges you a higher interest on the amount you owe. To pay down your debt — to balance your budget, as it were — you have to cut spending on lots of things (i.e., your standard of living declines), at least for a while. For your 14-year-old, that means less cash from dad for going to the latest blockbuster movie, or for buying the hot new video game from Wii, or for spending a day at the nearest amusement park.

That basically is what happens when a country’s debt grows too big. Investors shy away from lending money to the government — i.e., buying government bonds — or buy bonds only if they are paid a higher interest rate. Until its income starts growing, the government has to cut corners, reducing services or putting off highway repairs or even laying off workers. The government, of course, has the authority to increase its income whenever it wants, by raising taxes. As a result, it can increase its borrowings more easily than you can. Indeed, many economists argue that deficit spending by a government is an important way to get the economy growing again during a recession, which is why the federal government increasing our national debt now may be a good thing short term and not a bad thing.

But at some point, there is a limit to how much it can raise taxes, for all sorts of reasons. So, just like the Smiths and the Joneses, Uncle Sam can't get away with spending a lot more than it is taking in forever.

Bank Bailouts and the Smell Test

Q. I am not a Wall Street maven, a banker or financial type — I am a house builder in Philadelphia. My business, retirement, kids future, outlook — my world — has been turned upside down. I hear the news telling me it is because “the irresponsible borrowers who knew they couldn’t afford a mortgage but went forward anyway” caused the meltdown. And, because of that, the very banks that provided the mortgages then needed to be bailed out, and then an insurance company needed a bailout, and then a car company needed a bailout.

Now it seems that some banks want to repay the bailout funds to get away from the government setting rules on salary, etc. In less than six months the banks went from near death to profitability! So much so that they can still post a profit while paying back the government.

Something just doesn’t smell right, as my father would say!

I can’t get a bank to loan me a dime for my business, people are being laid off, interest rates are rising, and the cost of gasoline goes up even though demand is down and oil prices are down. I don’t see any way that I could have or will make an impact on any of the stuff that is controlling me. And the thought of the government being more a part of my life has scared me to death.

So could you explain to those of us who are just trying to go day to day what is going on and how we got here — in layman’s English, please?

A. Joe: I hear you. The financial meltdown, and the ripple effect through the economy, has many layers of complexity. Few experts — economists, Wall Street bankers, government regulators, corporate executives — anticipated the debacle, and fewer of those predicted just how bad it would be.

There is, as I noted in an earlier answer, lots of blame to go around. Many Americans have been living beyond our means: buying more luxury goods, taking more expensive vacations, going out to dinner more and, most of all, buying bigger houses than we can afford — and merrily borrowing as if the bills would never come due.

I’d like to point you to a several columns written by David Leonhardt, one of my business columnists, that I think explain in easy-to-understand terms what was happening and why. The first ran early in the crisis, the second in the middle of the crisis and third this March (toward the end of the crisis, we hope.) David writes about complicated topics with great sophistication and great clarity.

The goal of all the action coming out of Washington now, of course, is to address some of the problems that are affecting people like you. Various financial bailout programs are intended to grease the loan markets, though many banks remain cautious in making loans because they fear some of their existing loans still will turn sour if the economy weakens. And the stimulus money is aimed in large part at limiting worker layoffs.

You are right in wondering how it is that banks seemed to be troubled and were helped by bailout money but are now getting away from government rules and making profits again. While that may seem aggravating, the reality is that we do need a healthy — and profitable — financial system to get the economy going again; plus, it is worth noting that the most troubled banks that still have bailout money are still under stricter regulatory constraints regarding pay and other practices.

As for rising interest rates, we will have to get used to it. The federal government is borrowing at an unprecedented level. The more it borrows, the higher the interest rate that investors will want for buying government bonds — which has the effect of pushing up interest rates for all borrowers.

Yes, this is painful, and will continue to be painful; and no, it doesn’t seem fair to people who didn’t contribute to the problems. But this is the price that we all are having to pay for living too large as a nation.

What Did You Say the Market Did?

Q. Given the power of words to influence, it concerns me that the verbs used to describe movements in the stock market certainly, but also in housing, employment, etc., have the potential to shape public opinion and confidence. But they seem to be used inconsistently and often for effect rather than information.

How, for example, do you decide whether to say that the market went down, slid, decreased, dropped, fell, plummeted, crashed, etc., or alternatively went up, rose, increased, soared, etc.? In the interest of helping the public understand financial trends, should the use of such descriptions be standardized in your paper or even across financial reporting in general?

A. Jill, I fell upon your query while going through my e-mail, and immediately dropped everything to write an answer lest my P.C. crash or the computer server go down for some reason. I’m hoping I can rise to the occasion and increase my productivity with this response.

Okay, enough. You raise a valid point, one that I think reporters and editors try to keep in mind, though we need to be constantly vigilant.

Words matter because, as you note, collectively they can influence opinion, and we need to be careful in using them.

So, when is a negative day in the stock market a decline versus a fall or a drop or a plunge or a plummet or a (yikes) crash?

Some of these verbs are interchangeable, because the meanings are similar, while others clearly aren’t. Crash, for example, is a word rarely used when referring to stock market declines because of the connotation.

But there is no easy definition when it comes to crash, either. When the Dow Jones Industrial Average, uh, went down 22.6 percent on Oct. 19, 1987 — Black Monday — The Times eschewed the word, instead reporting: “Stock market prices plunged in a tumultuous wave of selling yesterday, giving Wall Street its worst day in history and raising fears of a recession.” The Wall Street Journal, less restrained, wrote simply: “The stock market crashed yesterday.”

On the other hand, I do think it is appropriate to refer to a long-term, high-double-digit decline — like the 50 percent or so drop in stocks from their peak in the fall of 2007 to the low point in March of this year — as a crash, though we might qualify it as a creeping or slow-motion crash.

But in the end, the choice of word is a matter of judgment. I think it’s O.K. to say that the market plunged if the drop is, say, 8 percent or more in a single day, and I certainly would excise it from an article if the market dropped less than that, especially if it was 5 percent or less. Ditto for plummet (which in my mind is akin to a plunge, although maybe not as steep, though I’m sure others would differ).

One of my colleagues points out, though, that it is appropriate in some cases to say the stock market plunged in rare instances even if it ended positively for the day. How can that be? Well, what if the market was up 6 percent at 3:45 p.m., and ended up only 0.1 percent when trading closed 15 minutes later? A drop-decline-fall (words that I think can pretty much be used interchangeably) of 5.9 percentage points in 15 minutes is so steep that it warrants a strong verb to describe the velocity of the drop.

I also vetted my answer with David Gillen, my finance editor, and he had another smart thought:

The stock market has been extremely volatile over the past year. This volatility has shaped the way we — and the investment community — think about daily market moves. In 2009 so far, the Dow has moved up or down by more than 2 percent on more than 30 days. Two percent? It never moved that much in a single day in all of 2006. So what would have been a plunge or a surge a few years ago now seems like just another day on the Street. In other words, context is important.

Given the swings of late, I generally don't consider a move in the Dow of, say, less than 3 percent to be particularly newsworthy, unless it pushes the Dow index — or the S. & P. 500, which is a better measure of the broader market — to some noteworthy level, such as when the S. & P. 500 finally crossed into the black for 2009.

I hope you like my answer. Or should I say my response?

Coverage of Japan

Q. Actually this is feedback, not a question: The series of articles from your business correspondent in Japan comparing and contrasting the U.S. and Japanese economies have been very enlightening. Please keep them coming and know that they are appreciated.

A. Michael: Thanks so much. You will forgive me this indulgence, but I have received a number of notes like this complimenting our business and economic coverage, and I haven’t responded to any.

Both Hiroko Tabuchi, our business correspondent in Tokyo, and Martin Fackler, who preceded her as business correspondent and is now the bureau chief reporting to the foreign desk, have done a terrific job putting into perspective what is going on Japan and comparing it to the U.S. Not only have they written about the here-and-now, but they also have compared what is happening in the U.S. today with the lost decade in Japan when its real estate bubble burst in the 1990s. In a global economy, one of our main missions is to provide our readers with global coverage, especially coverage of events that have a broad effect on the major economies in the Americas, Europe and Asia. Comparing and contrasting what is happening in these different economies is a major part of what we can tell readers to help them understand what is going on. Our correspondents covering business in Europe — Nelson Schwartz in Paris, Landon Thomas and Julia Werdigier in London, Carter Dougherty in Frankfurt and Andrew Kramer in Moscow — have made this a focus of their reporting, too, along with our reporters in Asia, whom I mentioned in an earlier response about economic coverage of China and India.